Response - FSA Mortgage Market Review

By: Nicola Hughes  Published: January 2010


Shelter welcomes this discussion paper, and the thorough and fundamental approach the FSA has taken. Some of the proposals are substantial and require further detailed discussion, but we believe there is a pressing need to push ahead with an ambitious timetable of reform, particularly on those areas that have wide ranging consensus.

Summary

Whilst the government has responded quickly to the repossessions crisis, there remain a number of unresolved long term issues that need to be addressed to ensure that such a crisis does not happen again. We are pleased to see that the FSA is taking a fundamental and long term view. Although the market has changed a great deal through the recession and many lenders are already exhibiting more responsible behaviours and lending more prudently, it is vital that these measures are enshrined in regulation to prevent more reckless lenders from returning to some of their former practices when the market has recovered. The concentration of irresponsible lending in the non-prime sector and its disproportionately high levels of arrears and repossessions suggest that regulation needs to be targeted at these higher risk lenders.

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